Brussels, 14/04/2015 (Agence Europe) - The decision by the Ecofin Council to follow a European Commission recommendation and grant France extra time (from 2015 to 2017) to get its public deficit back below the 3% of GDP cutoff point was not music to the ears of some MEPs.
At an economic dialogue with the European Commission, Germans Markus Ferber (EPP) and Bernd Lucke (CRE) and Pole Dariusz Rosati (EPP) expressed doubts about the way what they feel is excessive levels of flexibility have been granted when it comes to the budget trajectory recommended for France.
Economic and Financial Affairs Commissioner Pierre Moscovici said people should have greater trust in the Commission, the council and dialogue with the member states. He said that changes observed since the Juncker Commission came to power showed that the Commission was right to not have jumped in in November and also that the decisions taken in February were well-balanced.
With the economy recovery picking up, the French deficit will be lower than expected in 2014 (4.0%) and probably in 2015 as well (3.8% according to Paris, although the Ecofin Council recommends 4.0%). The final Eurostat figures are expected to be released on Tuesday 21 April (see EUROPE 11291).
Moscovici said that the unanimous decision about France was taken by the Commission after a policy debate and is judged to be balanced, demanding and not granting any special favours, being based on extremely objective data. He admitted that the bottom-up and top-down methodology was rather “convoluted” and didn't give the same results.
Additional efforts required in 2015. France has until the end of April to specify in its stability and reform programmes how it will make the additional structural budget (not including debt-servicing) requirement of 0.3% of GDP this year (i.e. between €3 billion and €4 billion) in order to give a grand total of 0.5% of GDP in 2015. Moscovici said that the Commission would be extremely firm on this 0.5% commitment for 2015, pointing out that for 2016 and 2017, the structural budget requirements were “considerable.” Euro Commissioner Valdis Dombrovskis welcomed the fact that the French authorities have confirmed their commitment to make the required extra budgetary efforts.
Sylvie Goulard (ALDE, France) was not impressed. She said that in a way, they were simply praising a fait accompli and described as “tricky” the fact that the Commission said that it had validated a new budget trajectory for France simply because it would not be possible to bring the public deficit back below the 3% cutoff point in 2015. (Mathieu Bion)